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us stock market, stock recommendation
Begin part 2 of 2
SUBSCRIBER QUESTIONS
Q: I have been watching several companies report earnings this week and many have not been well received. The problem is evident in HELE today, when it reported good earnings, revenue growth, and guided higher. While it all sounds good the revenues were not as high as the street expected and the stock was sold off. Could the market have set its growth expectations for the market as a whole to high for this quarter and be setting itself up for a disappointing earnings season.
A: Typically the eanings season works through a progression: first earnings, if they beat expectations, are rewarded. There is enthusiasm about growth, and the uncertainty leading into earnings unleashes some buying activity on the excitement. After the upside surprises become the norm then earnings are met with indifference (unless really blowout) and then are even sold on the news. Heading into earnings season the response to early earnings reports and guidance has been as mixed as the market action of late. HELE gets punished as you note, ADTN is up 9 sticks on raised guidance. We definitely have some concern approaching earnings. They will be better than expected, but if the market rallies up to September resistance and that overhead supply that showed itself Friday could act against stocks that have already built in some expectation of the improved earnings. If they come in at or just over expectations, they are at some risk. To us we are looking at what the indexes do at the September highs as that is proving to be the key point. Stocks will even drive through that or not, and earnings will have something to do with that.
SEMINARS ON CD
http://www.stockseminarsonline.com
This is Jon Johnson's own site devoted exclusively to seminars designed to teach you what you need to know about the stock market and stock movement and how to take advantage of those moves without incurring the usual high costs of travel and related expenses usually associated with seminars.
THE PLAYS
Good movers Friday: AMZN; SOX; AUDC; DRIV; CYPB; EBAY; MRV; SOFO; SPRT; YHOO
Thursday night play results:
SOFO: Nice volume move off of the 10 day MVA.
AXCA: Volume was strong as it rallied higher but could not hold all of the move.
NXTL: Nice gap higher on volume for a new buy point.
New Plays for Monday:
Upside:
Play Date: 10/04/2003
DCTM (Documentum--$22.89; +1.66; optionable): Application software
http://biz.yahoo.com/p/d/dctm.html
STATUS: Cup w/handle. DCTM is trying to make the breakout from its 4 month cup w/handle base sporting positive 4 to 3 accumulation (4 up weeks on rising volume to 3 down weeks on rising volume). DCTM was an early leader off of the October 2002 bottom, fell into a long base to start the year, broke out, and has since formed the current base (that is two off the October low, still early in the cycle). It formed a nice handle the past two weeks, where it pulls lower on low volume; this action frustrates those impatient holders and they sell as they see it fade from the highs. Then the stock blasts higher once those last sellers are gone. Friday DCTM was making that move higher on a strong volume shot, but it gave back $1 off the highs as the market pulled back late. Relative strength was making the breakout, indicating a solid base and move. Looking for it to continue its breakout move.
Volume: 2.431M Avg Volume: 1.336M
BUY POINT: $23.22 Volume=2M Target=$27.85 Stop=$21.59
POSITION: QDC AX - Jan. $22.50c (58 delta) &/or Stock
http://www.investmenthouse.com/cd/dctm.html
Play Date: 10/04/2003
GENR (Genaera Corp.--$5.05; +0.04; no options): Biotechnology
http://biz.yahoo.com/p/g/genr.html
STATUS: Cup w/handle/flat. GENR is working through a short 6 week base, consolidating a strong break higher in July and August. Accumulation in the short base is a solid 3 to 1 with strong money flow and a relative strength breakout. GENR was working laterally on low volume to end the week, tapping the 10 day MVA (4.87) on the low and rebounding. A very nice, neat little base, and looking for GENR to continue the move with a volume breakout from this base.
Volume: 699.815K Avg Volume: 1.026M
BUY POINT: $5.45 Volume=1.5M Target=$6.88 Stop=$4.85
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/genr.html
Play Date: 10/04/2003
JNPR (Juniper Networks--$16.63; +1.39; optionable): PC networking and communication
http://biz.yahoo.com/p/j/jnpr.html
STATUS: Test 50 day MVA (15.50). An interesting pattern. JNPR broke out of a sloppy, 2.5 month flat base in August and ran well to 18. It then spent September fully testing that move, coming all the way back to 15, the highs in the prior base. It held, regrouped, and then surged Friday, gapping over the 50 day MVA and the 18 day MVA (15.90) on a strong, strong volume surge. Looking to jump on this move and capture the momentum.
Volume: 19.413M Avg Volume: 11.138M
BUY POINT: $17.04 Volume=17M Target=$20.48 Stop=$15.85
POSITION: JUX AQ - Jan. $16c (61 delta) &/or Stock
http://www.investmenthouse.com/cd/jnpr.html
Continuing that look solid: NYB; ORCC; SIAL; TLCV; ASTM; CYPB; EGOV; GIGM
* * *
SUBSCRIBER PORTFOLIO: These are stocks subscribers suggest by vote that we put in a portfolio to track and move into the stocks if they set up well. Right now they are not performing too well with the exception of AVID.
AVID, DIS, GTRC, KKD, LPNT, OCR, TGT, UTSI
AVID 08/09 Test 18 56.62 +3.07 0 0 618K 0 0
Nice recovery, gapping back up over some resistance at 55 on a good shot of average volume. Has some resistance at 57.85. A strong volume move over that would be an add-to point for current positions.
OCR 08/09 Cup hdl 35.73 -0.09 36.54 43.85 1M 1.2M 34.78
Still a solid pattern, working through the handle. Good volume shot Friday. Just being patient and waiting for the breakout.
* * *
CONTINUING/WATCHLIST:
LEGEND
DATE: date play first appeared on report.
PLAY: Denotes the type of pattern or play.
Upside play types: A Wedge=Ascending triangle/wedge; BO=Breakout; Cup=Cup base; Cup hdl=Cup w/handle; DB hdl=Double bottom w/handle; Dbl btm=Double bottom; Flat=Flat base; FlyPlat=Flying Plateau; Pennant=Pennant; Rv H&S=Reverse head & shoulders; Saucer=Saucer base; Test 18=Testing 18 day MVA; Test 50=Testing 50 day MVA; Test BO=Testing the breakout (could be 10 day MVA test, etc.)
Downside play types: CCall=Covered Call; DWedge=Descending triangle/wedge; Dbl Top=Double top; H&S=Head & shoulders; Put (generic downside);
PIVOT=Buy point
Tgt=Target stock price for the play. Applies to stock and options.
Vol=Volume for the most recent session.
TgtV=Target volume to enter the play.
Stop=Stop advisory point. This is advisory and we may or may not exit a play if it hits this level depending upon market conditions.
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
^SOXX 09/30 Test 50 449.12 +19.33 446 476 1.9M 0 438
Current. Saw the move and flipped the play to upside.
AGRB 08/28 Rv H&S 3.14 +0.09 3.02 3.95 4.2M 6.7M 3.02
AMZN 05/03 BO 52.89 +2.8 30.3 35.45 14M 12M 48.48
Current. Gapped higher and made a good run on volume surge.
ASTM 09/22 Cup hdl 1.49 -0.02 1.86 2.38 1.1M 4.1M 1.64
Buy Not Hit. Tested below the 18 day MVA and rebounded to close holding the 18 day MVA on slightly higher, but below average volume. Still in the pattern.
AUDC 09/06 Test BO 8.63 +0.33 8.29 10.35 292K 461K 7.82
Current. Gapped up at the open and filled in the gap intraday then continued to move up on higher, above average volume.
AXCA 10/02 DB hdl 14.23 +0.33 14.82 17.78 330K 225K 13.82
Buy Not Hit. Gapped up at the open and continued to move up for a great gain on strong volume. Tapped 14.58 at the day's high, but could not hold the entire gain. Resistance is at 14.53.
BDY 07/16 Test BO 26.97 +0.29 19.58 23.25 140K 376K 28.85
Current. Gapped up at the open to close below the 18 day MVA showing a tight doji on lower, below average volume. Waiting for a bounce to exit the play.
CYPB 09/24 Test 18 8.55 +0.22 8.61 23.65 517K 294K 8.01
Current. Entered the play as the stock rose on strong volume surge.
CYTO 09/13 Cup hdl 11.25 +0.01 11.14 13.32 83K 463K 11.48
Exited. Dropped below the 18 day MVA so exited the play.
DIS 08/09 Test 50 21.28 +0.34 22.06 26.48 10M 9M 21.12
DRIV 08/25 Cup hdl 30.1 +1.13 25.75 30.25 765K 1.7M 28.12
Current. Gapped up at the open and continued to move up on higher, average volume. Resistance is at 31.08.
DRIV 08/06 Test 50 30.1 +1.13 24.18 27.48 765K 1.7M 28.12
Current.
EBAY 12/12 Test 18 57.35 +2.25 34.72 46 13M 12M 54.25
Current. Big gap up and soar on strong volume surge. Resistance is at 57.87 in July.
EBAY 10/15 Test 50 57.35 +2.25 31.22 46 13M 12M 54.25
Current.
EGOV 09/20 Cup hdl 4.75 -0.04 4.8 5.68 171K 264K 4.32
Current. Volatile session with 4.52 at the low and 4.94 at the high. Closed above the 10 day MVA on lower, but below average volume.
GIGM 10/01 Cup hdl 2.54 -0.01 2.98 3.88 1.1M 2.7M 2.42
Buy Not Hit. Pull back on very low volume. Still in the pattern.
HILL 09/27 BO 14.75 +0.8 14.6 17.32 1.9M 1.3M 13.24
Current. Tested the 50 day MVA and rebounded closing under the 10 day MVA on lower, but above average volume. Needs to hold above the 50 day MVA.
IMCO 09/18 Test BO 7.7 +0.21 8.45 10.45 133K 225K 7.34
Current. Beginning to move up the 10 day MVA on slightly higher, but still below average volume.
IRM 09/10 Put 36.29 -0.11 34.55 32 465K 500K 35.55
Current. Tested the 50 day MVA but rolled over to close above the 18 day MVA on slightly above average volume.
ISIL 09/24 Put 27.21 +1.22 25.42 23 2.1M 3M 26.04
Current. Big gap up on low volume. Will wait for a pull back to exit the play.
LPNT 08/09 Rv H&S 24.67 +0.21 29.06 35 756K 1.3M 27.03
Buy Not Issued. Gapped up at the open, but could not hold the entire gain and closed holding the 10 day MVA on slightly higher, but average volume. trying to recover.
LRCX 09/25 Put 24.38 +1.48 22.31 20 3.7M 2M 23.42
Exited. Gapped up on higher volume and filled the gap intraday, so exited the play.
LUV 09/11 Cup hdl 18.34 +0.26 18.54 22.25 4.9M 3.7M 17.88
Current. Gapped up at the open and moved higher on excellent volume surge. Resistance is at 18.78.
MRVC 09/11 Test 18 3.15 +0.13 2.81 3.68 1.4M 1.3M 2.79
Current. Gapped up at the open and moved higher on higher, but average volume. Resistance is at 3.40
MRVC 09/03 Cup 3.15 +0.13 2.65 3.68 1.4M 1M 2.79
Current.
NERX 09/16 Cup hdl 5.12 -0.2 4.05 5.12 402K 156K 4.74
Current. Tested resistance at 5 and rallied to close under the 10 day MVA on lower, but above average volume. May test support a 4.96 before it rebounds.
NVAX 09/03 DB hdl 7.7 +0.02 6.75 8.39 145K 302K 7.22
Current. Pull back showing a tight doji on lower, below average volume. Continues to move up the 10 day MVA.
NXTL 10/02 Cup hdl 20.62 +0.78 20.76 24.95 24M 27M 19.54
Current. Tested below the 10 day MVA and rebounded breaking through resistance at 20.04
NXTL 09/17 Cup hdl 20.62 +0.78 20.64 24.75 24M 24M 19.54
Current.
NYB 09/27 Cup hdl 32.1 +0.2 33.35 40 775K 1.5M 31.52
Buy Not Hit. Tested the 10 day MVA and rallied to close above the 10 day MVA on average volume. Still in the pattern.
ORCC 09/22 Test BO 7.06 +0.14 7.68 9.05 76K 165K 6.96
Buy Not Hit. Tested below the 10 day MVA and rebounded on lower, below average volume. Forming the handle.
ORCC 09/15 Cup hdl 7.06 +0.14 6.99 8.81 76K 165K 6.82
Current.
PDYN 09/29 DB hdl 2.58 -0.05 2.55 3.24 560K 450K 2.38
Current. Gapped higher at the open and filled in the gap intraday on lower, but above average volume.
QRSI 08/20 Cup hdl 9.33 +0.13 8.6 10.72 73K 184K 8.88
Current. Tested the 10 day MVA and rebounded higher on low volume. Tapped support at 9.60, but could not hold.
SBUX 07/30 Cup 30.22 +0.79 30.35 36.75 3.9M 6M 29.25
Current. Gapped up at the open to close showing a doji on stronger above average volume.
SBUX 07/01 Cup 30.22 +0.79 26.3 30.94 3.9M 6M 29.25
Current.
SIAL 09/29 Put 54.05 +0.36 53.35 50.15 434K 625K 54.02
Buy Not Hit. Tested the simple 50 day MVA, but rolled over to close above the 18 day MVA on lower volume. Should rollover from here.
SINA 09/09 Cup 37.7 +0.23 36.15 41 11M 12M 36.94
Current. Gapped up at the open but could not hold the gain to close holding the 10 day MVA on lower, but above average volume.
SINA 08/18 Test 50 37.7 +0.23 32.2 38.25 11M 10M 33.12
Current.
SOFO 10/02 Test BO 2.08 +0.29 2.05 2.74 836K 395K 1.81
Current. Tested the 10 day MVA and rallied on volume surge. Completed the test.
SPRT 08/28 A Wedge 11.86 +0.77 10.28 12.35 1.1M 910K 10.54
Current. Bounced off the 10 day MVA for a great move on volume surge. Here is the breakout.
SWIR 09/08 Test BO 14.38 -0.41 12.29 14.65 665K 425K 12.98
Current. Gapped up at the open, but could not hold the gain. Managed to retain a portion of yesterday's move. Still in good shape and moving up the 10 day MVA.
TELM 09/30 Test BO 1.41 -0.07 1.49 2 4.1M 7M 1.29
Buy Not Issued. Gapped up at the open to loose the gain and test 1.40 on lower volume.
TGT 08/09 Flat 39.35 +1.11 41.45 50 3.7M 5.7M 38.74
TLCV 09/23 Cup hdl 6.28 +0.05 7.08 8.54 362K 1.1M 6.32
Buy Not Hit. Volatile session with 6.12 at the day's low and 6.41 at the day's high. Closed showing a tight doji on the 10 day MVA on slightly higher, but still below average volume.
TSCO 10/01 Test 50 34.63 +0.24 35.28 42.35 575K 837K 32.25
Buy Not Hit.
TSCO 07/29 Test BO 34.63 +0.24 28.06 31.44 575K 494K 33.94
Current. Gapped up to close just below the 18 day MVA on lower, but average volume. Tapped 35.64 at the day's high, but could not hold the gain.
TSCO 06/03 Rv H&S 34.63 +0.24 23.42 27.62 575K 603K 33.94
Current.
TSCO 04/24 Cup hdl 34.63 +0.24 21.88 26 575K 603K 33.94
Current.
TSCO 04/03 Rv H&S 34.63 +0.24 19.3 22.19 575K 577K 33.94
Current.
TUES 09/27 Put 29.51 +0.41 28.54 26 177K 300K 30.05
Current. Relief bounce on much lower, below average volume. Tapped the 50 day MVA at the day's high, but rolled over.
VSV 09/25 Test BO 5.66 -0.12 6.42 8 65K 300K 5.71
Buy Not Hit. Tested below the 18 day MVA and rebounded to close below the 10 day MVA on low volume. Needs to hold here or we will drop.
WMGI 09/10 Flat 24.75 -0.09 26.04 31.25 112K 400K 24.68
Buy Not Issued. Tested the simple 50 day MVA and rallied to close below the 18 day MVA on lower, below average volume. Needs to hold here.
YHOO 09/22 Test BO 39.24 +1.33 37.95 45.25 17M 15M 36.88
Current. Big gap up at the open on stronger above average volume. Broke a new high.
YHOO 09/04 Rv H&S 39.24 +1.33 34.9 42 17M 20M 36.88
Current.
Good Investing!
Jon L. Johnson and The Daily Staff
All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Online Investment Services, LP or its paid consultants and are not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on our related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolio of Partners of Online Investment Services, LP or its paid consultants may, in some instances, include securities mentioned herein and on our web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors.
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